Norwich Union Healthcare has unveiled full details of its Stakeholder Health Care model, which aims to increase funding and deliver the health service the public demands.*
Norwich Union Healthcare has unveiled full details of its Stakeholder Health Care model, which aims to increase funding and deliver the health service the public demands.*
Incorporating the most successful elements of healthcare systems across Europe, Stakeholder Health Care aims to deliver a first class affordable one-tier service for everyone in the UK.
The model, which was announced as a concept in 2001, has been devised by Norwich Union Healthcare with NERA (National Economic Research Associates).
One of the key principles of Stakeholder Health Care is greater transparency – individuals would pay a separate premium for their healthcare and income tax rates would be reduced to reflect this. The model projects that the average premium for an individual, including dependent children, would be £1,518, approximately 10% of taxable income.
Under the Stakeholder Health Care model, the NHS would act as an insurer, competing with private health insurers to provide a standard package of services. The public would be able to choose their stakeholder insurer, based on premiums and quality of service.
Some of the key features include:
- The NHS continues as the main provider of health services
- Tax funding still flows into the system e.g. to pay premiums for the unemployed and public health
- The NHS acts as an insurer
- Insurers compete to provide a standard package of care
- Insurers, including the NHS, can offer ‘top-up’ services, charging a risk-rated premium if they wish
- Premiums are paid to a central fund and distributed to insurers
- Premiums are community-rated and allowed to vary as a proportion of income
Commenting on the proposed model, Tim Baker, Commercial Director for Norwich Union Healthcare, said: “While Derek Wanless has suggested that the NHS needs an 80 per cent increase in real terms funding by 2013, we believe it is questionable whether these increases can be raised by taxation alone.
“Stakeholder Health Care builds on the strongest features of the current system, but by creating greater transparency, choice and competition, there are bigger incentives to improve quality and tap into people’s ability to pay more for their healthcare.”
Research into other healthcare systems in Europe suggests that affordable top-up services would prove popular for a large proportion of the population, who are prepared to pay more for non- essential services – such as dentistry – and levels of comfort. Based on a third of the population spending £315 per year on top- up services, an additional £6.4 billion could be raised.
Norwich Union Healthcare will be talking to a number of key Government representatives and other organisations over the next few months to explain the full benefits of Stakeholder Health Care.
For a copy of the Executive Summary or the full report, titled ‘Stakeholder Health Care: Moving from Concept to Reality’ please e-mail request@norwich-union.co.uk. Alternatively a PDF version can be downloaded from www.norwichunion.com/health/publicrelations.
Media contact:
Liz Kennett at Norwich Union Press Office on 08703 66 68 63 or
Matt Buchanan at QBO Bell Pottinger on 0207 861 2511.
Edward Bramley-Harker, NERA, 0207 659 8534
Notes to editors:
- *In his April 2002 report, Derek Wanless suggested that by 2013 the NHS needs an unprecedented and sustained increase of 80% real terms funding to deliver the responsive health service citizens want.
- Norwich Union Healthcare was founded in 1990 as the healthcare arm of Norwich Union and now provides a range of income protection and private medical insurance products to around 750,000 customers. It is one of the largest providers of income protection and private medical insurance in the UK.
- National Economic Research Associates (NERA) is an international economic consulting firm founded in 1961 to provide clients with practical research and analysis of economic and financial issues arising in public policy, regulation, litigation and management. In the health sector, NERA has worked across Europe for governments, policy makers and private sector clients, providing advice on all aspects of health sector financing and reform. NERA employs some 300 professional economists in offices in the United States and in London, Madrid, Sydney and Brussels.
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